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Interactive single audit a to z redw aga pdt final

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2018 abq aga

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Interactive single audit a to z redw aga pdt final

  1. 1. expertise. The information provided herein is for informational purposes only and should not be construed as financial, investment, tax, accounting or legal advice. Interactive Single Audit - A to Z Sara Specht, CFE Senior Audit Associate II
  2. 2. Agenda. • Quiz • What is a Single Audit? • Auditee Responsibilities • Importance of a SEFA • Major Program Determination • Questions 2
  3. 3. Quiz – Question 1. Which of the following items are not required to be included in the Schedule of Expenditures of Federal Awards (SEFA)? A. List of individual federal programs by federal agency. B. The name of the pass-through entity and identifying number assigned by the pass-through entity for federal awards received as a subrecipient. C. Total federal awards expended for each individual federal program and the Catalog of Federal Domestic Assistance (CFDA) number or other identifying number when the CFDA information is not available. D. All of the information above is required to be included in the SEFA. 3
  4. 4. Quiz – Question 2. If monies are provided to subrecipients, how does this get reported for the SEFA? A. In the notes to the SEFA B. On the face of the SEFA C. Not required to be disclosed 4
  5. 5. Quiz – Question 3. Which of the following is not required to be disclosed in the notes to the SEFA? A. Significant accounting policies used in preparing the SEFA B. Whether the non-Federal entity elected to use the 10% de minimis indirect cost rate C. Balances of loan and loan guarantee programs outstanding at the end of the audit period for loans D. The total amount passed to subrecipients by entity name E. All of the above 5
  6. 6. Quiz – Question 4. Under the Uniform Guidance, which of the following situations would prevent an auditee from being low-risk? A. A single audit was performed in each of the two preceding audit periods. B. There was a significant deficiency in internal control over financial reporting in one of the two preceding audit periods. C. A material weakness was reported in a Type B federal program in one of the two preceding audit periods. D. The data collection form and reporting package for one or both of the two preceding audit periods was submitted to the Federal Audit Clearinghouse late. 6
  7. 7. Quiz – Question 5. Which of the following is not a threshold for determining Type A programs? A. At least $750,000, but is $20 million or less B. Greater than $25 million, but is $100 million or less C. Greater than $100 million, but is $1 billion or less D. Greater than $1 billion, but is $10 billion or less E. Greater than $10 billion, but is $20 billion or less F. Greater than $20 billion 7
  8. 8. What is a Single Audit? The Single Audit Act of 1996: • Promote sound financial management. • Establish uniformed requirements for audits. • Promote the efficient and effective use of audit resources. • Reduce burden. • Reliability of audit work performed. 8
  9. 9. What is a Federal Award? The Uniform Guidance defines a federal award as: • Federal financial assistance that a nonfederal entity receives directly from a federal awarding agency or indirectly from a pass-through entity. • Cost-reimbursement contracts that a nonfederal entity receives directly from a federal awarding agency or indirectly from a pass-through entity. • The instrument setting forth the terms and conditions of an award. 9
  10. 10. What is a Federal Program? The Uniform Guidance defines a federal program as: • All federal awards which are assigned a single number in the CFDA. • Federal programs designated as a cluster must be considered as one program when determining major programs. 10
  11. 11. Key Responsibilities of Auditees. The Auditee must: • Prepare the financial statements. • Evaluate and monitor noncompliance with federal statutes, regulations, and the terms and conditions of federal awards. • Promptly follow up and take corrective action on audit findings. 11
  12. 12. Key Responsibilities of Auditees – continued. • Procure and ensure it is properly performed and submitted when due. • Take reasonable measures to safeguard protected personally identifiable information (PPI). • Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the single audit. 12
  13. 13. Importance of a SEFA. • The SEFA serves as the primary basis that auditors use to determine which programs will be audited. • §200.510(b) of the Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502 of the Uniform Guidance, “Basis for Determining Federal Awards Expended.” 13
  14. 14. Key SEFA Information. • Federal agency prefix and Catalog of Federal Domestic Assistance (CFDA) three-digit extension (or other identifying federal numbers when the CFDA information is not available) - https://cfda.gov/ • Federal agency name • Name of individual federal program or cluster of programs (cluster) name • Is this a cluster? - If a cluster, list individual programs within the cluster. 14
  15. 15. Key SEFA Information – continued. • Award number(s) • Award period • Was award (or incremental funding under this award) received on or after December 26, 2014? • Award amount • Was any portion of the award passed through to subrecipients? - If so, total amount(s) passed through to subreceipients 15
  16. 16. Key SEFA Information – continued. • Is the award a subaward? - If so, what is the identifying number assigned by the pass-through entity? - Pass-through entity name - Subaward amount - Subaward period - If a subaward, was the original pass-through entity award (or incremental funding) received on or after December 26, 2014? 16
  17. 17. Key SEFA Information – continued. • Do any of the awards (or subawards) include non-cash assistance? • Does any aspect of the program include loans or loan guarantees? • Has the federal agency or pass-through entity requested that this program be audited as major under the provisions 200.518(c)(2) of the Uniform Guidance? • Name and contact information for Program Manager(s) • Name and contact information for Fiscal Manager(s) 17
  18. 18. Disclosure Checklist.
  19. 19. Disclosure Checklist – continued.
  20. 20. Disclosure Checklist – continued.
  21. 21. SEFA Answers. 23
  22. 22. SEFA Answers – continued. 24
  23. 23. Major Program Determination. Part I – Preliminary Step – Information Gathering • Review the SEFA prepared by the auditee 25
  24. 24. Major Program Determination – continued. Part II – Determine the Need for a Single or Program-specific Audit 26
  25. 25. Major Program Determination – continued. Part II – Determine the Need for a Single or Program-specific Audit – continued 27
  26. 26. Major Program Determination – continued. Part II – Determine the Need for a Single or Program-specific Audit – continued 28
  27. 27. Major Program Determination – continued. Part II – Determine the Need for a Single or Program-specific Audit – continued 29
  28. 28. Major Program Determination – continued. Part III – Determining If the Auditee is a Low-risk Auditee • An entity is considered a low-risk auditee if it meets All of the following criteria for each of the previous two audit periods. - Single audits were performed on an annual basis in accordance with the provisions of 2 CFR part 200, subpart F, including submitting the data collection form and the reporting package to the FAC by the due date. - Auditor’s opinion on whether the financial statements were prepared in accordance with GAAP, or a basis of accounting required by state law, and the auditor’s in-relation-to opinion on the SEFA were unmodified. - Auditor’s Yellow Book report on internal control did not identify any deficiencies in internal control over financial reporting as material weaknesses. - Auditor did not report a substantial doubt about the entity’s ability to continue as a going concern. 30
  29. 29. Major Program Determination – continued. Part III – Determining If the Auditee is a Low-risk Auditee – continued • None of the federal programs had audit findings from any of the following in either of the preceding two audit periods in which they were classified as Type A programs. - Internal control deficiencies that were identified as material weaknesses in the auditor’s report on internal control for major programs. - A modified opinion on major program in the auditor’s report on major programs. - Known or likely questioned costs that exceeded 5% of the total federal awards expended for a Type A program during the audit period. 31
  30. 30. Major Program Determination – continued. Part IV – Determining Major Programs Part V – Tests of Controls and Compliance Tests 32
  31. 31. Quiz – Question 1. Which of the following items are not required to be included in the Schedule of Expenditures of Federal Awards (SEFA)? A. List of individual federal programs by federal agency. B. The name of the pass-through entity and identifying number assigned by the pass-through entity for federal awards received as a subrecipient. C. Total federal awards expended for each individual federal program and the Catalog of Federal Domestic Assistance (CFDA) number or other identifying number when the CFDA information is not available. D. All of the information above is required to be included in the SEFA. 33
  32. 32. Quiz – Question 2. If monies are provided to subrecipients, how does this get reported for the SEFA? A. In the notes to the SEFA B. On the face of the SEFA C. Not required to be disclosed 34
  33. 33. Quiz – Question 3. Which of the following is not required to be disclosed in the notes to the SEFA? A. Significant accounting policies used in preparing the SEFA B. Whether the non-Federal entity elected to use the 10% de minimis indirect cost rate C. Balances of loan and loan guarantee programs outstanding at the end of the audit period for loans D. The total amount passed to subrecipients by entity name E. All of the above 35
  34. 34. Quiz – Question 4. Under the Uniform Guidance, which of the following situations would prevent an auditee from being low-risk? A. A single audit was performed in each of the two preceding audit periods. B. There was a significant deficiency in internal control over financial reporting in one of the two preceding audit periods. C. A material weakness was reported in a Type B federal program in one of the two preceding audit periods. D. The data collection form and reporting package for one or both of the two preceding audit periods was submitted to the Federal Audit Clearinghouse late. 36
  35. 35. Quiz – Question 5. Which of the following is not a threshold for determining Type A programs? A. At least $750,000, but is $20 million or less B. Greater than $25 million, but is $100 million or less C. Greater than $100 million, but is $1 billion or less D. Greater than $1 billion, but is $10 billion or less E. Greater than $10 billion, but is $20 billion or less F. Greater than $20 billion 37
  36. 36. Resources. • AICPA – GAQC: Auditee Practice Aids: The Schedule of Expenditures of Federal Awards https://www.aicpa.org/interestareas/governmentalauditquality/resources/auditeeresourcecenter/ singleaudittoolspracticeaidsandotherresourcesforauditees.html • Catalog of Federal Domestic Assistance https://www.cfda.gov • Federal Register – 2 CFR Part 200 https://www.federalregister.gov https://www.ecfr.gov • Compliance Supplement Appendix XI of 2 CFR Part 200 38
  37. 37. sspecht@redw.com 505.998.3428 Sara Specht, CFE Senior Audit Associate II Questions? 39

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